Bitcoin time value on the Lightning Network : Interview with Nik Bhatia ②
The Lightning Network changes the time-value aspect of Bitcoin because Lightning Network is a network of Bitcoin peers that agree to financial contracts that allow them to transact Bitcoin instantly with each other. Now if you have your Bitcoin dedicated to this network, you can facilitate payments between people. And, when facilitating the payment, you can earn an income for providing liquidity. So, with Lightning Networks, Bitcoin gains the time value of money in which you can earn income. Now, it's not Bitcoin in cold storage anymore where it's offline in your keys are private, rather it is now in a hot environment where your Bitcoin in an online environment and it's being used. It will be locked up by hash time-locked contracts, HTLC, which are smart contracts the Lightning Network uses to function. In brief, while your Bitcoin is tied up in a smart contract in the Lightning Network, it will gain time value, but if it's not, it won’t have time value.